Enefit Green unaudited interim report for Q1 2024
Enefit Green group’s operating income for Q1 2024 decreased by
11% while operating expenses for the period decreased by 22%
compared to the same period last year. As a result, EBITDA
increased by 3% to €42.4m and net profit for the quarter increased
by 10% to €33.4m (earnings per share €0.13).
Aavo Kärmas, Chairman of the management Board of
Enefit Green comments:
“We produced 494 gigawatt-hours of electricity (+22%) and 129
gigawatt-hours of thermal energy (-27%). The increase in
electricity production by a fifth was driven by newly completed
wind and solar farms and those under construction (+131
gigawatt-hours). The decrease in heat output was mainly due to the
sale of biomass assets.
We focused on the completion of wind and solar farms under
construction and invested nearly 105 million euros. We completed
construction works at Tolpanvaara wind farm in Finland. In
Lithuania at Akmene wind farm, the collapsed wind turbine was
replaced and first wind turbines were erected in Kelmė I wind farm.
At Sopi-Tootsi renewable energy area in Estonia, we have reached
the installation stage of wind turbines, installation of solar
panels is already ongoing. Compared to the second half of last
year, we have significantly improved the availability of Šilutė
wind farm in Lithuania and we continue to maintain good
availability of the WinWind wind turbines in Estonia.
Quarterly KPIs were affected by lower electricity market prices
and the prices of the concluded power purchase agreements (PPA).
Due to the setup activities at the wind farms under construction
and low wind speeds, the electricity production target was not
achieved (-95 gigawatt-hours), which continued to cause significant
volumes of electricity purchases.
This year our focus is on timely completion of the wind and
solar farms under construction and maintaining the high
availability of existing assets. We will also continue to work with
the development portfolio to increase the value of the company in
the longer run.”
Webinar to present the results of Q1
2024
Today, 2 May 2024 at 13.00 EEST Enefit Green
will host a Webinar in English to present and discuss its Q1 2024
results. To participate, please follow this link.
Significant events
- Completion of construction works at the Tolpanvaara wind farm
in Finland
- At Akmene wind farm in Lithuania, wind turbine that collapsed
last year was replaced, start of negotiations with GE regarding
compensation for the damage
- Installation of wind turbines started at Kelmė I wind farm in
Lithuania
- Preparations for the installation of wind turbines are being
finalized at the Sopi-Tootsi wind farm
- Co-development agreement with RES Global Investment regarding
wind farms in Poland (up to 360 MW)
- Direct line power purchase agreement with Elcogen in
Estonia
- With closing of the sale of Valka and Paide cogeneration
plants, we have completed the exit from biomass assets
- In agreement with the supervisory board, chairman of the
management Board Aavo Kärmas will resign as of 1 July 2024
Key figures
|
Q1 2024 |
Q1 2023 |
Change |
Change % |
PRODUCTION AND SALES VOLUMES |
|
|
|
|
Electricity production, GWh |
494 |
406 |
89 |
22% |
incl. new wind and solar farms |
169 |
38 |
131 |
343% |
Electricity sales |
627 |
495 |
133 |
27% |
Heat energy production, GWh |
129 |
176 |
(47) |
(27)% |
|
|
|
|
|
OPERATING INCOME, m€ |
68.9 |
77.5 |
(8.6) |
(11)% |
Sales revenue, m€ |
56.2 |
69.7 |
(13.5) |
(19)% |
Renewable energy support and other income, m€ |
12.7 |
7.8 |
4.9 |
63% |
EBITDA, m€ |
42.4 |
41.1 |
1.3 |
3% |
NET PROFIT, m€ |
33.4 |
30.5 |
2.9 |
10% |
EPS, € |
0.13 |
0.12 |
0.01 |
10% |
Sales revenues and other operating income
The group’s total electricity production grew by
89 GWh (+22%) to 494 GWh in Q1, with electricity production at new
wind and solar farms and wind and solar farms under construction
increasing by 131 GWh. Nevertheless, electricity production
was around 95 GWh lower than forecasted. This was due to weather
conditions (mainly lower than expected wind speeds) as well as low
availability of wind farms under construction. The negative impacts
to production compared to the projections were -42 GWh and -47 GWh
respectively.
Total operating income decreased by €8.6m, the
figure reflecting a decrease in revenue of €13.5m and an increase
in renewable energy support and other operating income of €4.9m.
Operating income for Q1 2023 includes €20.0m generated by assets
sold in Q4 2023 and Q1 2024 €8.0m (‘assets sold’). Excluding the
impact of assets sold, the group’s operating income was €57.5m for
Q1 2023 and €60.9m for Q1 2024 and operating income grew by €3.4m,
the figure reflecting revenue growth of €4.1m and a decrease in
other operating income of €0.7m.
Of the €4.1m revenue growth, €4.9m resulted from
electricity sales revenue that was driven by higher production. In
Q1 2024, the average electricity price in the group’s core markets
was €87.0 €/MWh (Q1 2023: €100.5/MWh). The group’s average implied
captured electricity price was €81.4/MWh (Q1 2023: €101.2/MWh). The
implied captured electricity price differs from the average market
price in the group’s core markets, because it takes into account
long-term fixed-price power purchase agreements (PPAs), renewable
energy support, purchases of balancing energy, electricity
purchases from the Nord Pool day-ahead and intraday markets and the
fact that wind farms do not produce the same amount of electricity
every hour.
The group’s average price of electricity sold to
the market in Q1 2024 was €77.6/MWh compared with €82.4/MWh a year
earlier. The group sold 292 GWh of electricity to the market in Q1
2024 compared with 234 GWh a year earlier.
In Q1 2024, 335 GWh of the group’s electricity
production was covered by PPAs signed at an average price of
€75.0/MWh. A year earlier, 260 GWh of electricity was sold under
PPAs at an average price of €89.8/MWh. The average price of
electricity sold under PPAs has decreased significantly year on
year because the settlement periods of PPAs signed in Lithuania and
Finland in 2021 at lower prices began in Q1 2024.
In Q1 2024, we purchased 138 GWh of electricity
from the market at an average price of €106.1/MWh, compared with 92
GWh at an average price of €116.7/MWh in Q1 2023 (the prices and
volumes exclude the electricity purchased for pellet production in
Q1 2023). The volume of electricity purchased increased because
sales under PPAs and the share of production covered by PPAs have
increased and therefore the purchases needed to balance the
baseload PPA portfolio have also increased. The purchase price
decreased compared to Q1 2023 because the market price has
declined, but due to a higher wind profile discount the difference
between the purchase price and the market price increased. In
Lithuania, the Q1 wind profile discount increased by 3.3 percentage
points year on year, rising to 15%. In Estonia, the wind profile
discount rose by 0.4 percentage points to 13.5%. In 2024, we
started to supply electricity under a PPA in Finland, which is why
we also started to purchase electricity in Finland. In Finland, the
wind profile discount in Q1 2024 was 28.1%.
Renewable energy support and other operating
income increased by €4.9m. The figure reflects the gain on the sale
of the Paide and Valka CHP plants of €5.4m and a decrease in
renewable energy support of €0.8m. The amount of renewable energy
support received is based on the quantity of energy produced by
wind farms eligible for support, which in Q1 2024 was 12.0 GWh
lower than a year earlier.
EBITDA and segmental
breakdown
The factor with the strongest impact on EBITDA
development was the price of electricity sold, which decreased
compared to Q1 2023 (impact: -€8.3m). Due to PPAs, the quantity of
electricity sold grew considerably (impact: +€12.3m), which also
increased the volume of electricity purchased to balance the
electricity portfolio (impact: -€4.7m). The combined effect of the
above factors on EBITDA development is influenced by the volume and
profile of electricity produced during the period. Electricity
production grew by 22% year on year.
The impact of assets sold on EBITDA development
was +€3.1m. The largest item was the gain on the sale of the Paide
and Valka CHP plants of €5.5m.
Excluding the effects of the electricity price
and volume, Iru cogeneration plant had a negative impact on EBITDA.
The calculation takes into account the effects of heat energy, gate
fees for waste received and technological fuel. The EBITDA of the
Iru cogeneration plant decreased because gate fees decreased by
€0.7m due to a decline in the volume of waste received and expenses
on natural gas increased by €0.3m due an unplanned production
interruption in February during which replacement heat was produced
from natural gas.
Fixed costs excluding the fixed costs of assets
sold grew by €1.0m. The increase was attributable to higher
maintenance costs and IT expenses.
Based on total operating income and EBITDA, the
group’s largest segment is wind energy, which accounted for 73% of
operating income and 76% of EBITDA for Q1 2024. The cogeneration
segment contributed 25% to operating income and 32% to EBITDA. The
smallest reportable segment is solar energy, which accounted for 1%
the group’s operating income and 1% of the group’s EBITDA for Q1
2024.
EBITDA of all reported segments increased
compared to the reference period (by €1.2m, €0.6m and €0.1m for the
wind, cogeneration and solar energy segments respectively). The
change of EBITDA of the cogeneration segment was positively
affected by assets sold (+€3.1m) and negatively by Iru power plant
(-€2.5m).
Net profit
The group's net profit increased by €2.9m to
€33.4m in the reporting period. The growth in net profit was
supported by an increase in EBITDA, a decrease in depreciation of
€0.5 million (increase of depreciation stemming from new operating
assets, decrease of depreciation due to assets sold), an increase
in net financial income by €0.2m and a decrease in income tax
expense by €0.9m.
Capital Expenditures
The group invested €104.8m in Q1 2024, which is
€12.9m more than in Q1 2023. Growth resulted from development
investments, which extended to €104.7m. Of this, €77.6m was
invested in the construction of three wind farms: €64.8m in the
Sopi-Tootsi wind farm and €12.9m in the Kelme wind farms – €10.4m
in Kelme I and €2.5 in Kelme II. The largest solar energy
development investment was made in the Sopi solar project in the
amount of €17.6m.
Base investments remained on a negligible level
of €0.1m.
Financing
At 31 March 2024, the amortised cost of the group’s
interest-bearing liabilities was €503.2m (31 December 2023:
€482.4m). In Q1 2024, the group drew down bank loans of €30m and
the level of investment loans raised but not drawn down at 31 March
2024 amounted to €285m. The average interest rate of bank loans
drawn down at 31 March 2024 was 3.79% (31 December 2023: 3.75%).
Net debt/EBITDA ratio stood at a level of 4.39 (31 December 2023:
3.97). The ratio’s increase is corresponding to the expectation due
to the large number of development projects under construction.
Condensed consolidated interim income
statement
€ thousand |
Q1 2024 |
Q1 2023 |
Revenue |
56,192 |
69,691 |
Renewable
energy support and other operating income |
12,729 |
7,813 |
Change in
inventories of finished goods and work in progress |
0 |
(5,060) |
Raw materials,
consumables and services used |
(20,674) |
(24,792) |
Payroll
expenses |
(2,225) |
(2,486) |
Depreciation,
amortisation and impairment |
(9,342) |
(9,815) |
Other operating
expenses |
(3,595) |
(4,055) |
OPERATING PROFIT |
33,085 |
31,296 |
Finance
income |
570 |
407 |
Finance
costs |
(306) |
(380) |
Net
finance income and costs |
264 |
27 |
Profit (loss)
from associates under the equity method |
(10) |
19 |
PROFIT
BEFORE TAX |
33,339 |
31,342 |
Income tax
income (expense) |
107 |
(820) |
PROFIT
FOR THE PERIOD |
33,446 |
30,522 |
|
|
|
Basic
and diluted earnings per share |
|
|
Weighted
average number of shares, thousand |
264,276 |
264,276 |
Basic earnings
per share, € |
0.13 |
0.12 |
Diluted
earnings per share, € |
0.13 |
0.12 |
Condensed consolidated interim statement
of financial position
€ thousand |
31 March 2024 |
31 December 2023 |
ASSETS |
|
|
Non-current assets |
|
|
Property, plant and equipment |
1,123,597 |
1,027,057 |
Intangible assets |
59,857 |
59,891 |
Right-of-use assets |
8,764 |
9,097 |
Prepayments for non-current assets |
54,240 |
55,148 |
Deferred tax assets |
2,095 |
2,013 |
Investments in associates |
538 |
548 |
Derivative financial instruments |
5,169 |
5,054 |
Non-current receivables |
1,826 |
0 |
Total non-current assets |
1,256,086 |
1,158,808 |
|
|
|
Current assets |
|
|
Inventories |
3,402 |
3,180 |
Trade and other receivables and prepayments |
40,930 |
55,082 |
Derivative financial instruments |
3,720 |
3,806 |
Cash and cash equivalents |
34,989 |
65,677 |
|
83,041 |
127,745 |
Assets classified as held for sale |
0 |
15,370 |
Total current assets |
83,041 |
143,115 |
Total assets |
1,339,127 |
1,301,923 |
€ thousand |
31 March 2024 |
31 December 2023 |
EQUITY |
|
|
Equity and reserves attributable to shareholders of the
parent |
|
|
Share capital |
264,276 |
264,276 |
Share premium |
60,351 |
60,351 |
Statutory capital reserve |
5,556 |
5,556 |
Other reserves |
164,566 |
163,451 |
Foreign currency translation reserve |
(108) |
(162) |
Retained earnings |
257,163 |
223,718 |
Total equity |
751,804 |
717,190 |
LIABILITIES |
|
|
Non-current liabilities |
|
|
Borrowings |
437,916 |
454,272 |
Government grants |
3,054 |
3,102 |
Non-derivative contract liability |
12,471 |
12,497 |
Deferred tax liabilities |
12,412 |
12,412 |
Other non-current liabilities |
5,239 |
5,239 |
Provisions |
8 |
8 |
Total non-current liabilities |
471,100 |
487,530 |
Current liabilities |
|
|
Borrowings |
67,685 |
32,126 |
Trade and other payables |
44,870 |
54,445 |
Provisions |
6 |
6 |
Non-derivative contract liability |
3,662 |
5,674 |
|
116,223 |
92,251 |
Liabilities directly associated with assets classified as
held for sale |
0 |
4,952 |
Total current liabilities |
116,223 |
97,203 |
Total liabilities |
587,323 |
584,733 |
Total equity and liabilities |
1,339,127 |
1,301,923 |
Further information:Sven KunsingHead of Finance
Communicationsinvestor@enefitgreen.eehttps://enefitgreen.ee/en/investorile/
Enefit Green is one of the leading renewable energy producers in
the Baltic Sea area. The Company operates wind farms in Estonia and
Lithuania, waste-to-energy CHP plant in Estonia, solar farms in
Estonia and Poland and a hydroelectric plant in Estonia. In
addition, the Company is developing several wind and solar farms in
the mentioned countries, Latvia and Finland. As of the end of 2023,
the Company had a total installed electricity production capacity
of 515 MW and a total installed heat production capacity of 50 MW.
During 2023, the Company produced 1,343 GWh of electricity, 604 GWh
of heat energy and 156 thousand tonnes of wood pellets. In the end
of 2023, Enefit Green exited the biomass based CHP and pellet
production businesses.
- EGR1T Q1 2024 interim report eng
- EGR1T Q1 2024 presentation eng